Nuclear subs would end our strategic free ride

As a geographically isolated middle power in an increasingly fractious strategic environment, Australia can no longer afford to wantonly free-ride off the US alliance and its embedded principle of extended nuclear deterrence.

Within our lifetimes, the world’s biggest economy will be an avowedly non-democratic state, China, that threatens the stability of our “global commons" – namely, liberty, democracy, free trade, and a rules-based international order – the US hegemony has fostered. Ironically, no nation has benefited more from this than China.

The US faces weak growth, high unemployment, a ballooning public debt-to-GDP ratio, fiscal crises and few easy policy solutions. In contrast, Australia has robust growth, limited government debt, a low jobless rate, export leverage to developing nations, and ample policy ammunition.

You can imagine, therefore, the consternation our fading defence spending is causing in the US. Labor has cut the defence budget to just 1.6 per cent of GDP, the lowest it has been since the 1930s.

The Australian Strategic Policy Institute’s Mark Thomson says the
Gillard
government’s “long-term commitment to strengthen Australia’s defence has evaporated. And there are few signs the opposition is willing to do more."

The problem is that there is a pervasive belief within political and defence circles that Australia should “free-ride" off the preparedness of US taxpayers to commit far greater resources to safeguarding global security. This plan worked while US power was uncontested, and US economic prosperity permitted it to subsidise alliance partners’ defence costs, but it is no longer tenable.

Thomson observes: “The US is spending 4.7 per cent of GDP on defence while we have been cruising along below 2 per cent for the past 18 years. It’s clear we’ve been free-riding at each and every stage of our 60-plus years of alliance with the US."

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Another reason Australian politicians have got away with this is because younger generations have not experienced existential threats during their lifetimes.

The last time they were forced into conscription was 1972.

An analyst respected by both parties,
Hugh White
, says there is a one-in-10 chance the US and China will be engaged in war in the next 15 or so years, and an even stronger probability this turns nuclear once it starts.

Simply throwing more money at the military is not the answer. While acknowledging that free-riding is the “unspoken core issue at the heart of Australian strategic policy", Thomson from ASPI backs it because “even if we boosted our defence spending to 3 per cent of GDP we would remain irrelevant to the balance of power between China and the US".

There are, in fact, modest “asymmetric" investments we can make that would have a tremendous impact on the US alliance and Indo-Pacific relations. One of these would be a small fleet of nuclear-powered but conventionally equipped submarines leased off the shelf from the US.

Last month the Centre for Independent Studies costed the acquisition of eight Virginia-class subs at $11 billion less than the $36 billion price tag ASPI has put on the Gillard government’s 12 diesel-electric “future submarines".

And the CIS estimates that the total annual costs of running a Virginia-class platform would be around $70 million, which is cheaper than the 2011 overhead for a Collins-class vessel.

The Virginia class, which has unlimited range and can travel at twice the speed of the Collins class, also never needs to be refuelled ­over its 30-year life. In response to questions following the Financial Review’s revelations, US ambassador Jeffrey Bleich explicitly left the option on the table: “To the extent Australia were ever interested in developing nuclear capabilities . . . we could start having that conversation."

Mahnken, who is now the US Naval War College’s professor of strategy, said yesterday: “The door to leasing the Virginia class should be wide open as far as the US is concerned. A growing number of US strategic analysts believe this is a good idea.

“One of the great comparative advantages of a nuclear-powered submarine is its speed and endurance. It allows you to transit more quickly and remain on-station much longer than any conventional boat. They would be far better suited to Australia’s geographic circumstances than a conventional solution," Mahnken said.

Australia is now in a position to make a durable, if belated, investment in its most important security alliance. Taxpayers who expect our military to supply dependable “longevity insurance", and US Secretary of Defence Leon Panetta and Secretary of State
Hillary Clinton
, should demand nothing less.

A previous version of this story said the CIS estimates that the total annual costs of running eight Virginia-class platforms would be around $70 million, or almost one-tenth the 2011 overhead for six Collins-class vessels.